(Credit: Hryshchyshen Serhii via Shutterstock)
Yikes: The smartphone market is expected to suffer an even deeper slump due to the ongoing US-Iran conflict, according to research firm IDC.
IDC already predicted that global smartphone shipments would fall 12.9% this year, citing the ongoing AI-driven memory shortage. But on Tuesday, the company forecasted an even worse decline of 13.9%, blaming the US-Iran war for further sapping demand.
“The smartphone market is headed into its worst year on record,” IDC said in a research note, calling it “the steepest annual contraction in smartphone history,” assuming the projection holds.
(Credit: IDC)Rising gas and oil prices resulting from the blockade of the Strait of Hormuz mean smartphone vendors face higher costs, including for the transportation of goods and components. “Combined, these pressures are compelling vendors to reduce shipments, raise prices, and concentrate on higher price tiers—elevating smartphone ASP [average selling price] to a record $550, up $100 from last year,” says IDC research director Nabila Popal. The $550 figure is also up from the previously projected $523 ASP for this year.
(Credit: IDC)In another bad sign, IDC projects smartphone shipments will fall next year too, amounting to a 1% year-over-year decrease, rather than starting to recover, as it originally forecasted.
The good news is that consumers in North America probably won’t see as much impact, since smartphone pricing is already high here. Instead, emerging markets, where $200 phones are more common, will see the most pain, IDC says. In the Middle East and Africa, smartphone shipments are projected to fall 23%
“For consumers, it means the era of ultra-cheap smartphones is over,” Popal adds.
Still, IDC maintains that Apple and Samsung might benefit from the dire situation by attracting customers usually served by smaller Android players. “A combination of secured memory supply, a stronger Galaxy S26 line-up, and aggressive midrange positioning is allowing Samsung to capture demand that smaller Android vendors simply cannot serve as memory costs squeeze their bill of materials,” IDC says.